Click here for an interactive chart of copper prices
It extended gains along with stock markets after US jobs data came in weaker than expected, easing fears that the Federal Reserve would withdraw stimulus.
“It’s bouncing today because of bargain hunting. The overall attitude is still bullish for industrial metals and commodities in general,” Julius Baer analyst Carsten Menke in Zurich told Reuters.
“The fundamentals for industrial metals are good, but expectations have been excessive as to where prices should be based on the fundamental backdrop.”
In China, prices fell to their lowest in nearly six weeks, with the most-traded July copper contract on the Shanghai Futures Exchange dropping as much as 3.6% to 70,470 yuan ($11,001) a tonne.
Copper smelting extends recover
Global copper smelting extended its rebound in May, touching fresh highs for the year as operations continued to take advantage of strong prices, data from satellite surveillance of copper plants showed.
Activity in China was strong at first, but weakened through the month as smelters undertook seasonal maintenance, satellite service SAVANT and broker Marex said in a joint statement on Friday.
“We are now entering a fascinating period, where seasonal declines in smelter activity in China and the rest of Asia are to be expected, and other regions are showing no signs of slowdown,” said Guy Wolf, global head of analytics at Marex, which helped to develop SAVANT.
“Given the importance of Chinese demand, it remains to be seen if the external supply can satisfy China’s demand during this maintenance window.”
Global dispersion index rose to an average of 49.4 in May from 43.6 a month earlier.
Under SAVANT’s dispersion index, 50 points indicate smelters are operating at the average level of the last 12 months. It also has a second index showing the percentage of active smelters.
The dispersion index for China, the world’s top refined copper producer, increased to 48.9 in May from 44.3 in April. Europe climbed to 45.7 in May from 37.7 in a month before while North America rose to 38.9 from 33.1 in April.
(With files from Reuters)
